Median boomer retirement account $144,000

[Raiders70]

Thought I was the smartest guy in the world when I bought 25 shares of Amazon for $711 and sold out three months later when it hit $1000. I have been sick to my stomach almost every day since.lol

 

[BirdOfWar]

i don't like calculators that make you guess how much yoyu['re going to spend in retirement. right now we have daycare x 2, tuition, college savings, etc. how the heck am i supposed to know what i'm going to spend in 25 or 30 years?

It's certainly isn't easy to predict with so many different things affecting this, but if you know what your total spending per month/year is now and how much you spend in each category(daycare/tuition/college savings/retirement savings/etc) you can subtract those amounts to come up with an expected amount you'll spend per year.

 

[yowza]

I tend to think you greatly overrate the average American and their financial literacy, if they were all so great at it, then this trend and their $144,000 average would not exist.

Marketing and the "i deserve it" spend now mentality are powerful forces. And man do bank and credit card companies make it pretty easy to borrow money.

 

[yowza]

Thought I was the smartest guy in the world when I bought 25 shares of Amazon for $711 and sold out three months later when it hit $1000. I have been sick to my stomach almost every day since.lol

Smarter than all the people who have never bought any. Buffett kicks himself about this one.

 

[Sigmapolis]

Go back and read the first post in this thread, the link was people 65+ and how much money they had saved for retirement. It was not talking about the well-educated professional class only, but everyone.
So ya, you are over estimating the knowledge that the average person either has or is willing to learn over this topic. It really doesn't matter that they should learn it, the fact is they have not.
I would say the same about all the other social issues that you keep bringing up, in regards to the work force.
The greatest time for the average American wage wise, was during a time of high union activity. Now if you want to talk about the wealthy, that would be today, the new Gilded Age, where the federal government does everything in their power to make sure they not only make more money, but keep it.

If you add all the women and non-Whites shut out of the labor force of your vaunted 1950s and early 1960s as "zeros" like they should be to make an apples-to-apples comparison, then those averages don't look so good anymore. The huge inequality of the era is massively understated because of how we do not measure such data accounting for those formally and informally barred from the labor market. Trying to repeat the same set of policies would fail (again, foreign competition) and be horrifyingly discriminatory.

 

[Stormin]

They still can -- on a 1955 standard of living.

Nobody really wants to do that, though.

Check out the comparatively tiny homes, cruddy cars, lack of household amenities and consumer goods (including no air conditioning or television), lack of information, and the cheap but disgusting processed foods that defined the era.

We would consider a "middle class" standard of living from the 1950s as only slightly above poverty by our standards -- or worse. Cheaper college is less meaningful when relatively few people attended, and of course healthcare was cheap. They had only primitive medical technologies and techniques compared to today (and the simpler, the cheaper it is). I would much rather have cancer now (as expensive as it is to treat) compared to back then, when the treatment was more like, "Well, good luck partner!"

Of course healthcare is cheap when the most complex machine they have is an X-Ray -- this is why their standards of living were so much lower. Even the college experience (sparse and crowded rooms, classrooms with no technology) was a spartan one then.

And as usually you ignore the point.

Yep, it could look good for a White middle class family in that era. But that windfall was built on the back of formal and informal barriers on the labor market to women and non-White workers, low immigration rates, and the rest of the industrialized world save small outposts like Canada, Australia, and New Zealand being smoldering craters.

As soon as Japan and Germany got their acts together after the war, it was hard going for so many large industries (e.g., steel and cars) who could not handle the competition. No law or policy broke those unions -- the reality of competition did.

If you did that today, you would probably increase middle class incomes. I just doubt you really want to (or hope you really do not want to) discriminate against people like that again, essentially end foreign immigration, and bomb every factory and highway between Ireland and the Ural Mountains and sink Japan back into the sea.

So the middle class is doing great today? LOL. Top income earners are doing great. Those in the middle not so much. Yippee. We have air conditioning And people going bankrupt at unprecedented levels over healthcare costs. My family did not eat processed foods growing up. Fresh produce and made from scratch food. Pop and Potato Chips were a rarity. As far as wages, the disparity between management and labor have never been higher. Today we find we can’t even get meat processed without the labor. Time to put management on the lines to butcher pigs and cattle. Who is really more essential? Those who work or those who watch others work?

 

[AuH2O]

1955. When a middle class family could live comfortably on a single income with a stay at home parent. When health care costs were practically nothing. College tuition cost very little. Sounds awful.

Again, people are using a period of time when the US was about the only industrialized nation with significant capacity with unprecedented demand for goods due to rebuilding after the war and trying to apply some minor domestic policies as the "cause" of the economic boom.

EVERY policy was an absolute drop in the bucket compared to 1. Massive Demand worldwide, 2. Massive supply constraints worldwide, 3. The US being about the only country with the infrastructure in place to respond.

Throw in discriminatory hiring, and if you were white and had a pulse in the 50s you should've been wildly successful. Hell, despite completely legal, explicit and socially acceptable racism, African American's were also succeeding well in this period.

The idea of correlating things like pensions to economic success in a completely and wildly unprecedented Supply/Demand scenario in the US is ridiculous.

 

[bos]

Thought I was the smartest guy in the world when I bought 25 shares of Amazon for $711 and sold out three months later when it hit $1000. I have been sick to my stomach almost every day since.lol

I had it around 500. Then sold. Oops

 

[AuH2O]

So the middle class is doing great today? LOL. Top income earners are doing great. Those in the middle not so much. Yippee. We have air conditioning And people going bankrupt at unprecedented levels over healthcare costs. My family did not eat processed foods growing up. Fresh produce and made from scratch food. Pop and Potato Chips were a rarity. As far as wages, the disparity between management and labor have never been higher. Today we find we can’t even get meat processed without the labor. Time to put management on the lines to butcher pigs and cattle. Who is really more essential? Those who work or those who watch others work?

But that is a completely different argument. Talking about disparity in real income and wealth is a good discussion but not really the point here. The point was people talking about things like DB vs. DC and unions as being the cause for middle class success in the 50s, when anybody that has even heard the term "economics" that does not have an agenda to push understands that there's almost nothing the US policymakers or companies could've done at that time to fail. There never has been and never will be a period so set up for success for the US than post WWII. Not even close. And when you look at the causes that is a good thing.

 

[SEIOWA CLONE]

They still can -- on a 1955 standard of living.

Nobody really wants to do that, though.

Check out the comparatively tiny homes, cruddy cars, lack of household amenities and consumer goods (including no air conditioning or television), lack of information, and the cheap but disgusting processed foods that defined the era.

We would consider a "middle class" standard of living from the 1950s as only slightly above poverty by our standards -- or worse. Cheaper college is less meaningful when relatively few people attended, and of course healthcare was cheap. They had only primitive medical technologies and techniques compared to today (and the simpler, the cheaper it is). I would much rather have cancer now (as expensive as it is to treat) compared to back then, when the treatment was more like, "Well, good luck partner!"

Of course healthcare is cheap when the most complex machine they have is an X-Ray -- this is why their standards of living were so much lower. Even the college experience (sparse and crowded rooms, classrooms with no technology) was a spartan one then.

And as usually you ignore the point.

Yep, it could look good for a White middle class family in that era. But that windfall was built on the back of formal and informal barriers on the labor market to women and non-White workers, low immigration rates, and the rest of the industrialized world save small outposts like Canada, Australia, and New Zealand being smoldering craters.

As soon as Japan and Germany got their acts together after the war, it was hard going for so many large industries (e.g., steel and cars) who could not handle the competition. No law or policy broke those unions -- the reality of competition did.

If you did that today, you would probably increase middle class incomes. I just doubt you really want to (or hope you really do not want to) discriminate against people like that again, essentially end foreign immigration, and bomb every factory and highway between Ireland and the Ural Mountains and sink Japan back into the sea.

I can't speak to living standards in 1955, I wasn't born yet, but as one growing up in the 60's and 70's here in Iowa, you could not be further from the truth. No matter what your stats say.

Both I and my wife's parents never had a day of college, I am not sure my FIL even made it through HS. But he fought in WW2, came home and got a factory job that allowed him to purchase a home, 2 cars and the rest of it. My MIL never worked until my wife was in HS.
My situation was much the same, my dad came out of the service in the 50's, they built their first home in 1968, growing up we always had 2 vehicles, AC in the house, a camper and boat to use on Lake Rathbun on weekends. When each of us turned 16,17 he bought us our first car. Mine was a 1976 Camaro, my mom never worked, and he did all that driving his rock truck.
Our parents weren't doctors or lawyers, but made a very good middle class life for themselves and their children. And just like the other 95% of Iowans they were white, non gay people.
This was a time when WW2 had been over for 20 to 25 years, Europe and Asia had rebuilt.

Couples lived on one income because that was all that they needed, I do not remember many mom's talking about "how it sucked not working outside of the home" every day. I sure there were some, but most seemed to enjoy their lives, at least on the surface. We knew many people that traded cars either every year or two at the most.
Life for the majority of people in Iowa during this time was very good, now if you were black or gay, it probley did suck. But those people also find barriers in their path today. That is a totally different discussion.

 

[Sigmapolis]

"The warm and fuzzy glow of my nostalgia is stronger than objective data."

I can't speak to living standards in 1955, I wasn't born yet, but as one growing up in the 60's and 70's here in Iowa, you could not be further from the truth. No matter what your stats say.

Both I and my wife's parents never had a day of college, I am not sure my FIL even made it through HS. But he fought in WW2, came home and got a factory job that allowed him to purchase a home, 2 cars and the rest of it. My MIL never worked until my wife was in HS.

Those factory jobs are gone now. Mostly due to automation... machines never show up drunk to work... and yes, some of them are gone overseas.

Employment in manufacturing peaked in 1979 at 19.5 million. It was about 12.8 million before the crash and is now down to 11.7 million after it. If those men come back into the world today, those jobs are gone, and no union is going to restore them.

Many of those are never coming back, and those jobs require an education and technical skills far beyond what your grandparents had.

Unions are not going to be able to reverse automation and globalization.

My situation was much the same, my dad came out of the service in the 50's, they built their first home in 1968, growing up we always had 2 vehicles, AC in the house, a camper and boat to use on Lake Rathbun on weekends. When each of us turned 16,17 he bought us our first car. Mine was a 1976 Camaro, my mom never worked, and he did all that driving his rock truck.

There are a lot of things on the far-right there that were not standard items in the 1960s like they are now. Cut out your consumption of all those consumer products and electronics, travel far less, and agree to only be serviced by the healthcare technology that existed in 1970 as opposed to the space age technology we have now, and I bet a single income could make the living you describe up there pretty easily.

Our parents weren't doctors or lawyers, but made a very good middle class life for themselves and their children. And just like the other 95% of Iowans they were white, non gay people.
This was a time when WW2 had been over for 20 to 25 years, Europe and Asia had rebuilt.

Toyota's export of vehicles...

Still pretty small at that point. It did not really hit hard until the late 1970s and into the 1980s. This chart is almost exactly inverse to the strength of the union-dominated model of the labor market you have so much nostalgia over, come to look at it.

Couples lived on one income because that was all that they needed, I do not remember many mom's talking about "how it sucked not working outside of the home" every day. I sure there were some, but most seemed to enjoy their lives, at least on the surface. We knew many people that traded cars either every year or two at the most.
Life for the majority of people in Iowa during this time was very good, now if you were black or gay, it probably did suck. But those people also find barriers in their path today. That is a totally different discussion.

No. It is not. It is a central part of the discussion.

Formal and informal barriers to work for women, non-White, and otherwise "heterodox" workers (and as you mentioned, gay people would certainly qualify) made the remaining labor provided by White men more valuable. Not everywhere in the U.S. of that era was as lily White as Iowa, and the political and social prohibitions of Jim Crow throughout the Southeast extended just as much to participation in a full economic life.

I never said that middle class White families did not have it good at that point in history. I just think it was transient and illusory once the rest of the world picked itself up off the ground and built on the backs of discrimination and intimidation of oppressed populations. You might not have seen that as a White kid in Iowa driving your Camaro around, but it was there. I think you should be wise enough to open your eyes to that.

My grandmother was the valedictorian of her high school class and became... a nurse off a two-year degree. If she was born in 1987 instead of 1927, then she ends up as the doctor instead of the nurse. Keeping women like her out of the applicant pool sure made things easier on White men applying to medical school, though. She always told me she wanted to be a doctor, but her parents told her, "But girls are nurses and teachers before they get married, not doctors." She even told me her parents assented to her nursing training so she could find a nice doctor to marry. She must have disappointed them when she went with a lineman for an electric cooperative in the form of my grandfather.

That kind of stuff was very real.

That is just one example of the billions that distinguished the era -- all sorts of formal and informal barriers that made it good to be a White guy (in Iowa).

 

[Stormin]

Again, people are using a period of time when the US was about the only industrialized nation with significant capacity with unprecedented demand for goods due to rebuilding after the war and trying to apply some minor domestic policies as the "cause" of the economic boom.

EVERY policy was an absolute drop in the bucket compared to 1. Massive Demand worldwide, 2. Massive supply constraints worldwide, 3. The US being about the only country with the infrastructure in place to respond.

Throw in discriminatory hiring, and if you were white and had a pulse in the 50s you should've been wildly successful. Hell, despite completely legal, explicit and socially acceptable racism, African American's were also succeeding well in this period.

The idea of correlating things like pensions to economic success in a completely and wildly unprecedented Supply/Demand scenario in the US is ridiculous.

1955 was 10 years after the war. The Marshall Plan was enacted in 1948. By 1952, Europe was exceeding pre-war levels when the Marshall Plan ended. Labor was paid well. Europe was not in ruins in 1955. It had recovered.

 

[Sigmapolis]

1955 was 10 years after the war. The Marshall Plan was enacted in 1948. By 1952, Europe was exceeding pre-war levels when the Marshall Plan ended. Labor was paid well. Europe was not in ruins in 1955. It had recovered.

Haha. Britain ended meat rationing in 1954. "Recovered."

Equalling prewar production levels when the U.S. had an unmolested head start of around 20 years at that point is not exactly "recovered."

Back to where they started...? Maybe. Back to where they would have been? No.

Europe and Japan were not ready to compete with the U.S. again until the 1970s and early 1980s. Look at U.S. steel production levels...



...which peaked in 1974. That is, when Japanese imports start hitting. J.D. Vance has a nice walk through of this in Hillbilly Elegy. His grandfather, a West Virginia hillbilly with little education, had a good job with Armco in Middletown, Ohio, but Armco ran into trouble in the 1970s and nearly went bankrupt in the early 1980s because of Japanese imports. The only thing that saved the company and the mill was a merger with Kawasaki Steel Corporation (ironically a Japanese firm, straight out of Tokyo) and a huge renegotiation of their contract with their union to reduce their labor and pension costs.

No government policy did any of that. The realities of a global economy did.

I am sure you guys do not like it, but the Japanese are to blame.

Plus, steel production levels since the 1980s in the U.S. have been pretty constant. But the amount of labor attached to the sector has declined.

Automation and technology are squeezing labor out of production.

Unions are not going to help you a smidgen with that.

John Henry is losing to the machine.

If you think we should stop the automation, then you think we should ban bulldozers and force everybody to do construction projects with shovels. Or spoons.

 

[AuH2O]

1955 was 10 years after the war. The Marshall Plan was enacted in 1948. By 1952, Europe was exceeding pre-war levels when the Marshall Plan ended. Labor was paid well. Europe was not in ruins in 1955. It had recovered.

Obviously the effects are going to take a few years and last potentially for decades. I mean in that time if you wanted to buy a house you had to save 50% or more of the value to get a loan. It's not like people got good middle class jobs in 1950 and were ready to buy a house in 1953. It took YEARS to save money to buy a house for a middle class person. Additionally, there was production that had taken place in western Europe that was supplanted by the US moving forward.

And because economic growth by 1952 had surpassed prewar levels in western Europe, that is nothing compared to the growth in the US. Not close. Again, it should not be surprising that Western Europe was going to have economic growth. Kind of unavoidable when you have to rebuild most of your cities and infrastructure. Meanwhile the US absolutely exploded.

So there were clear, obvious and massive impacts that made the US an economic juggernaut for the few years after the war. There were also long-lasting effects to being the only serious industrial nation at even close to capacity for that period.

 

[SEIOWA CLONE]

"The warm and fuzzy glow of my nostalgia is stronger than objective data."



Those factory jobs are gone now. Mostly due to automation... machines never show up drunk to work... and yes, some of them are gone overseas.

Employment in manufacturing peaked in 1979 at 19.5 million. It was about 12.8 million before the crash and is now down to 11.7 million after it. If those men come back into the world today, those jobs are gone, and no union is going to restore them.

Many of those are never coming back, and those jobs require an education and technical skills far beyond what your grandparents had.

Unions are not going to be able to reverse automation and globalization.

There are a lot of things on the far-right there that were not standard items in the 1960s like they are now. Cut out your consumption of all those consumer products and electronics, travel far less, and agree to only be serviced by the healthcare technology that existed in 1970 as opposed to the space age technology we have now, and I bet a single income could make the living you describe up there pretty easily.



Toyota's export of vehicles...

Still pretty small at that point. It did not really hit hard until the late 1970s and into the 1980s. This chart is almost exactly inverse to the strength of the union-dominated model of the labor market you have so much nostalgia over, come to look at it.



No. It is not. It is a central part of the discussion.

Formal and informal barriers to work for women, non-White, and otherwise "heterodox" workers (and as you mentioned, gay people would certainly qualify) made the remaining labor provided by White men more valuable. Not everywhere in the U.S. of that era was as lily White as Iowa, and the political and social prohibitions of Jim Crow throughout the Southeast extended just as much to participation in a full economic life.

I never said that middle class White families did not have it good at that point in history. I just think it was transient and illusory once the rest of the world picked itself up off the ground and built on the backs of discrimination and intimidation of oppressed populations. You might not have seen that as a White kid in Iowa driving your Camaro around, but it was there. I think you should be wise enough to open your eyes to that.

My grandmother was the valedictorian of her high school class and became... a nurse off a two-year degree. If she was born in 1987 instead of 1927, then she ends up as the doctor instead of the nurse. Keeping women like her out of the applicant pool sure made things easier on White men applying to medical school, though. She always told me she wanted to be a doctor, but her parents told her, "But girls are nurses and teachers before they get married, not doctors." She even told me her parents assented to her nursing training so she could find a nice doctor to marry. She must have disappointed them when she went with a lineman for an electric cooperative in the form of my grandfather.

That kind of stuff was very real.

That is just one example of the billions that distinguished the era -- all sorts of formal and informal barriers that made it good to be a White guy (in Iowa).

What does your grandmother born in 1927 have anything to do with this discussion?

You want to blame everything on our modern way of life, I take a simpler approach.

Seems like this says it all. Started with Reagan and continues today.

https://www.cbpp.org/research/pover...ics-on-historical-trends-in-income-inequality

 

[Gunnerclone]

Disagree with some. DBs do pay out like an annuity. State DBs are much lower cost than individual plans. More money available for benefits.

I believe that is an incorrect description of IPERS. IPERS says it can pay an up to 60% of final average salary benefit using contributions and investment earnings, assumed to be 7% average overtime, not every year..

The advice usually given individual investors is to buy index funds with a large portion of investment dollars. DB plan investment and plan costs usually undercut index fund costs.

Depends on the DB plan. My plan allows full lump sum. My wife’s plan only allows partial lump sum/partial annuitization once a certain benefit value is reached.

 

[Sigmapolis]

What does your grandmother born in 1927 have anything to do with this discussion?

You want to blame everything on our modern way of life, I take a simpler approach.

Seems like this says it all. Started with Reagan and continues today.

https://www.cbpp.org/research/pover...ics-on-historical-trends-in-income-inequality

Is there a denser substance than osmium?

If your story of life being so great in the 1970s for you and your Camaro is relevant, then my story of my grandmother being shut out of seeking to become a doctor because the medical community and her family discouraging it in the 1940s and the 1950s is equally relevant. It is really easy to make life look good for a select class of White men when you are restricting opportunities for women, LGBTQ+ people, and non-White workers.

Your chart is cute but does not reveal much.

The same trends have been happening worldwide, including in Europe and Japan and developing nations. Markets have become much more "winner-take-all" and globalized in structure, meaning that winning means winning bigger than ever before and low-skilled workers in developed nations have billions of low-skilled (and cheaper) competitors in developing nations against them. You can not like Reagan if you like (and I don't particularly like him, either), but I do not know how you can somehow assign blame to him for a very similar sort of chart in the Czech Republic or South Korea.

So no, it does not explain everything. At all. It hides a ton of context and implies the U.S. is an outlier with those trends, which it is absolutely not.

 

[Cyched]

This thread went about the way I expected

 

[Mtowncyclone13]

For now, you can probably just use 80% of gross family income will be needed. As you get close to retirement, you will want to be more specific. If you are serious about saving, get to 15% of income saved as soon as you can, regardless of matching money.

We save 15% of my gross into my 401k, max out both our Roth IRAs, and wife has a pension, All told we're over 20% of gross plus matches. I always tetter between "am i saving enough vs am i saving too much".

 

[dmclone]

What does your grandmother born in 1927 have anything to do with this discussion?

You want to blame everything on our modern way of life, I take a simpler approach.

Seems like this says it all. Started with Reagan and continues today.

https://www.cbpp.org/research/pover...ics-on-historical-trends-in-income-inequality

What am I missing here? Doesn't this point out that every income level has seen an increase? Since this is household income, it would be interesting to have another graph with average household size during this time frame along with number of working adults.